Key Roles of the Insurance Authority and New Regulation Landscape for Insurance Companies. John Leung CEO, Insurance Authority 21 September 2017

Transcription

1 Key Roles of the Insurance Authority and New Regulation Landscape for Insurance Companies John Leung CEO, Insurance Authority 21 September

2 The Hong Kong Insurance Authority established in December 2015 to comply with the requirement of the International Association of Insurance Supervisors (IAIS) insurance regulators should be financially and operationally independent 2

3 Purpose To facilitate sustainable development of the insurance industry and protect policyholders with a modernized regulatory infrastructure 3

4 Key statutory functions Regulate insurers and insurance intermediaries Promote proper conduct and practices Conduct studies, propose law reforms Assist Financial Secretary to maintain financial stability Facilitate market development, promote competitiveness Promote public education 4

5 Our Organization Industry Advisory Committee on Long Term Business Industry Advisory Committee on General Business Insurance Authority Corporate Services Committee External Relations Committee CEO s office External Relations Section Legal Section CEO Audit Committee Codes and Guidelines Committee Long Term Business Division General Business Division Market Conduct Division Policy and Development Division Corporate Services Division Staff (currently about 170 and will gradually increase to an establishment of 300 in two years) 5

6 Core values Agile Accountable Building trust Collaboration Driving change Embracing innovation 6

7 Phased approach Phase 1 Phase 2 7 Dec 2015 to 26 June 2017 IA was vested with certain administrative functions only and co-existed with the Office of the Commissioner of Insurance (OCI) From 26 June 2017 Takeover of OCI s statutory functions Self-regulatory regime for intermediaries remains unchanged Phase 3 Within 2 years after 26 June 2017 Takeover of the direct regulation of intermediaries 7

8 Key tasks Prudential regulation Risk-based Capital Regime (RBC) Promote Insurtech Policyholders Protection Scheme Regulation of intermediaries Fees and levy 8

9 Insurance Ordinance: key amendments Approval of Key Persons in Control Functions Transitional arrangements for Pre-existing Appointments Determination of fit and proper (s. 14A(1)) Further regulatory powers on insurers Appellate mechanism and checks and balance 9

10 Key persons in control functions Control Functions Risk management Financial control Compliance Internal audit Actuarial Intermediary management (not yet in operation) Designated individuals, not necessarily a staff/employee Solely or jointly responsible Transitional arrangements for individuals already responsible for control functions before

11 New regulatory powers on insurers New regulatory powers (ss.41a 41W) To conduct inspection without warrant To conduct investigation without warrant Apply to court for inquiry into failure Obtain Magistrate s warrants to enter premises and seize records and documents Take disciplinary actions against insurers Grounds on which such powers may be exercised clearly set out Procedure requirements for exercising such powers Take note of GL 18 11

12 Insurance Appeals Tribunal (IAT) The IAT has been established to review specified decisions (including disciplinary decisions) made by IA (s.97 and Sch.10) Mr Douglas Tam Tak-yip, SC appointed as chairperson for a 3-year term; 23 other individuals appointed as members for a 2-year term from The IAT (Chairperson + 2 ordinary members) will be formed when there is a case to be reviewed 12

13 Checks and balances Must publish draft rules to be made under an IO provision for public consultation Must submit annual budget and corporate plan to the Financial Secretary for approval Must table annual report before LegCo Bound by the Ombudsman Ordinance and Prevention of Bribery Ordinance; must comply with Personal Data (Privacy) Ordinance Director of Audit may conduct value for money audit on IA 13

14 Fees and Levy Insurance (Prescribed Fees) Regulation Additional user fees will be introduced, e.g. Application for authorization of insurer Application for additional class of business Application for transfer of business of insurer Request for accounting concession Levy on insurance premiums from policyholders from

15 Levy rates Phase 1 Phase 2 Phase 3 Phase to to to From onwards Levy rate 0.04% 0.06% 0.085% 0.1% Levy cap Life insurance $40 $60 $85 $100 General insurance $2,000 $3,000 $4,250 $5,000 15

16 Future of insurance industry depends on Insurance Authority Close collaboration The industry The practitioners 16

17 17